NZDUSD: Move to 0.6950 expected during the weeks ahead - Westpac

Imre Speizer, Research Analyst at Westpac, notes that the NZD/USD finally broke free of its multi-week slumber, in a downward direction.

Key Quotes

“The main catalysts were a disappointing GDT dairy auction and the resurgent US dollar, helped by reports the ECB is considering tapering its QE program. Economic activity remains strong, but inflation is nowhere to be seen which means the RBNZ will cut on 10 Nov.

Technically, the break below a head-and-shoulders neckline at 0.7220 on 4 Oct signals a move to 0.6950 during the weeks ahead. That level coincides nicely with the low formed in July.

Further ahead, RBNZ easing combined with Fed tightening should see sub-0.70 NZD/USD by year-end.”